Subscribe to Economics Daily for the latest news and analysis.Federal Reserve Governor Michael Barr said the Trump administration’s trade policies could put the US central bank in a difficult position by generating persistent inflationary pressures and higher unemployment.

Policymakers face a scenario that could force a choice between keeping prices in check and maximizing employment.

The Fed operates with a dual mandate of keeping the labor market healthy while maintaining stable prices. At the moment, the labor market remains solid and inflation, while not at the 2% annual level the Fed desires, has come down significantly. That could change if some of the more aggressive Trump tariffs take effect.